Surviving the House Appraisal: A How-To Guide for San Diego Buyers

When a San Diego home sale gets to the point that an appraisal is being completed, the seller and buyer are both feeling the pressure. If the appraisal comes back much lower than what has been agreed on, the buyer can be in trouble. If the seller will not bring the price down, the buyer will need to match the price with money out of their pocket. 

While a San Diego buyer cannot change the outcome of an appraisal, here are five tips to get through the process.

It Is What It Is

Unfortunately, there is little influence that a San Diego buyer or seller can have during the appraisal process. An appraiser is going to give their honest opinion on the home. There are certain guidelines that they have to follow regardless of the situation. Trying to sway an appraiser to value higher is not going to work.  

While this can feel frustrating to a buyer who sees a lower appraisal than expected, it is for their own protection. Having these guidelines in place helps to avoid appraisal fraud. Without these guidelines, lenders could influence appraisers to change their prices so a mortgage could be put through, even if the house was not worth that much. The value that an appraiser decides on should be the market value of the home.

Do Your Homework

The houses that have recently sold in the San Diego neighborhood are going to influence the pricing on the house. There are always different circumstances that can change the amount a house is sold for. If there are many properties that have sold for significantly less than what they were worth, it will be harder to get a higher price when the home is appraised.

Using a local appraiser can help avoid this problem. A local appraiser will be experienced in the San Diego area and will know what homes were sold under dire circumstances or even foreclosed on. 

While you are not allowed to ask for an appraiser by name, using the words “local” or “experienced” can help to get an appraiser that knows the San Diego neighborhood and how to accurately find the value of homes.

ABC: Always Be Communicating

Ask the real estate agent that is helping to buy the home to communicate with the appraiser. The agent can update them on what sales have happened in the neighborhood. If the appraiser is not local, they can benefit from learning more about why other homes were sold for a certain price. It can help to cushion the impact of a home that was sold at a huge discount.

Understanding the Appraisal

There are so many reasons a house appraises for less than expected. If the neighborhood has seen a recent increase in value, it does not always reflect in the appraisal. The prices of homes are quickly rising, but there have been few homes sold at this price and the information the appraiser has may be outdated. If there are no homes that have sold recently, they may pull data from a neighborhood that does not reflect the value of the home.  

If there are main rooms located in the basement, the house may not value as high.  The value of rooms in a basement are required to be set lower than that of main floor rooms. Even having a better location or view can make a house more desirable, but does not increase the value.

Review

Even though there is little that can be done after a report is generated, it is good to look over the information. If there is any information that is incorrect, it should be pointed out. Fixing errors can help an appraisal come back at a higher value.  

The appraisal on a San Diego house is important for the buyer and seller. It can be the make or break in a deal. If a house comes back valued vastly different than how it was priced, a seller may lose out on the deal if they do not change their pricing. A buyer can offer to pay more out of their own pocket, but it is done with the knowledge that the home did not value as high as they are paying.